What are the best mortgages in Portugal for non-residents?

You've decided to buy a property in Portugal—great choice!  Now it's time to explore the mortgages in Portugal available for non-residents.

Fortunately, many Portuguese banks offer mortgages tailored to foreigners looking to move or invest in property here.

Keep reading to discover how to choose the best Portuguese mortgage for your needs.

Comparison of the best 8 mortgages in Portugal 

Here's a quick overview of the mortgages in Portugal available for non-residents.

As a general rule, non-residents can typically borrow up to 90% of the property's purchase price, provided their effort rate (percentage of income allocated to loan repayments) does not exceed 40%. 

The good news? Interest rates are the same for both residents and non-residents.

1. Novo Banco

Novo Banco is one of the most competitive mortgage providers in Portugal for non-residents. 

The bank offers both fixed-rate and variable-rate mortgages tailored to your specific financial situation. In addition, it provides insurance and investment funds designed for foreign non-residents.

For a loan of €150,000 over 30 years, the loan-to-value (LTV) ratio would be 60%.

Pros

• offers financing of up to 80% for non-residents from the EU, UK, Canada, and the USA when purchasing a second home
• free life insurance

Cons

• the appraised value or estimated cost of construction is determined exclusively by Novo Banco's appraisers, certified by the CMVM. This can add extra costs and lengthen the mortgage process

2. Bankinter

Bankinter offers various mortgage options for non-residents in Portugal, including financing up to 80% for purchasing a second home.

Non-residents can benefit from competitive spreads starting at 1.25% and fixed rates from 2.50%.

Pros

• Bankinter provides non-residents with promotional fixed-rate mortgage options with terms ranging from 1 to 30 years
• the process of applying for a Bankinter mortgage is 100% online, except for the visit to the notary's office

Cons

• Higher costs due to fees applied by Bankinter
• Bankinter imposes charges for early mortgage repayment, which could be costly for those who wish to pay off their mortgage early. The fees are 0.5% for variable-rate mortgages and 2% for fixed-rate mortgages

3. BPI

BPI offers a flexible mortgage solution for non-residents, available with both fixed and variable rate options, and terms of up to 30 years. For instance, the BPI Fixed Mortgage comes with an annual interest rate of 4.2%.

Pros

• loan amounts range from €75,000 to €1,500,000
• supports multiple currencies, including EUR and GBP, and accepts applicants from diverse nationalities and residency countries
• opportunity to reduce the interest rate by up to 0.75% when purchasing additional BPI products

Cons

• A maximum loan-to-value (LTV) ratio of 70%, meaning applicants must provide at least 30% of the property's value as a down payment
• An opening fee of up to 1.0%, which increases the initial cost of securing the mortgage

4. ABANCA

ABANCA offers mortgage solutions with both mixed-rate and fixed-rate options, with terms of up to 40 years.

The base spread is 2.50%, which can be reduced to 1.00% by contracting and maintaining specific products and services with ABANCA.

Pros

• offers financing up to 90% of the property's appraisal or purchase value (whichever is lower) for primary residences, and up to 70% for secondary homes or other purposes.

Cons

• To benefit from reduced interest rates or spreads, clients are required to contract and maintain additional products and services with ABANCA which could lead to additional costs and obligations for the borrower 

5. CGD - Caixa Geral de Depositos

CGD offers various mortgage solutions for those interested in investing in Portugal, whether to buy, build, or renovate a home. 

They provide financing up to 80% of the property's valuation (75% for buy-to-let properties), with the amount not exceeding 80% of the purchase, construction, or home improvement costs.

Pros

• they offer up to 90% financing if you plan to buy a property for permanent residence in Portugal
• mortgage terms range from 1 to 30 years, to be repaid by age 80
• access to special conditions when buying a property from the bank's portfolio, Caixa Imobilário

Cons

• tends to have higher pricing on mortgage offerings

6. UCI

UCI offers financing of up to 70% of the property's purchase value, depending on the applicant's profile and the guarantees provided. 

The bank provides a fixed-rate option at 5.28% for 15 years or a mixed-rate option that combines fixed and variable rates for added flexibility.

Pros

• non-residents can access loans of up to €3,000,000
• no translation required for most documents, which can be submitted in their original language

Cons

• financing is available for up to 70% of the property's value, meaning you'll need a larger deposit compared to other banks.
• €312 opening fee, adding to the overall cost of securing a mortgage

7. Crédito Agrícola

Crédito Agrícola offers both fixed and variable-rate mortgages with terms of up to 40 years, available to applicants of various nationalities and residency statuses.

You can benefit from a 2-year fixed rate of 2.45%, saving up to €177.58 per month in the first two years. 

Pros

• Loan amounts range from €75,000 to €2,000,000, accommodating a wide range of property needs
• Opportunity to reduce the interest rate by 0.85% when contracting additional products

Cons

• The application process can be complex, requiring multiple documents, which might slow down the approval process
• The maximum loan-to-value (LTV) ratio is 70%, meaning you must provide at least 30% of the property's value as a down payment

8. Santander

Santander, a subsidiary of the Spanish banking group, also offers competitive mortgage options in Portugal. You can borrow amounts ranging from €75,000 to €1,000,000, with a base spread of 1.90%, which is highly competitive in the Portuguese market.

You can choose from mixed-rate or fixed-rate schemes with terms of 10, 20, or 30 years, providing flexibility to match your financial goals.

Pros

• range of Santander mortgage options with up to 80% financing available
• opportunity to lower the interest rate by up to 0.80% when contracting additional products
• no translation required for documents in English, German, or French

Cons

• 1.5% opening fee, which adds to the overall cost of the mortgage
• multiple conditions must be met to access the lowest spread, which can complicate the process

9. Millennium BCP

Millennium BCP is a popular choice for non-residents seeking a mortgage in Portugal. They offer various mortgage options with competitive rates and favorable terms.

They don't have a favored applicant profile but prefer doctors, engineers, lawyers, and digital nomads. The applicant's net income is one of the most important things in their assessment.

Pros

• quick and straightforward application process
• mortgages can be signed in even less than 1 month
• the maximum DTI (debt-to-income ratio) ranges from 20% to 30%, depending on the financial profile. Millennium BCP does not consider whether the client has other credit products in their home country, nor do they request loan or mortgage contracts

Cons

• a minimum property purchase amount of 100,000 euros, which might not suit all borrowers
• the mortgage process is not fully online; physical presence is required for signing the agreement

In summary

When searching for mortgages in Portugal as a foreigner, it's essential to evaluate both interest rates and the additional costs or fees tied to each loan.  While some lenders may advertise lower interest rates, higher fees could result in a more expensive overall mortgage.

To find the best option, compare offers from various lenders before deciding. Although this can be time-consuming, platforms like Homevest make the process easier.

Homevest connects you with skilled brokers who gather multiple offers, allowing you to compare and choose the mortgage in Portugal that best aligns with your financial goals.

With Homevest Portugal, you can benefit from features such as:

• product support assistance for any questions you might have about the Homevest platform
• experienced mortgage brokers to prepare your mortgage application and submit it to banks on your behalf
• a free and secure service focused on your best interests
• mortgage content library to learn about how mortgages work in Portugal and explore available options

Frequently asked questions

What are the qualifications for a mortgage loan in Portugal?

The qualifications for a mortgage loan in Portugal can vary depending on the lender. However, in general, some of the requirements for obtaining a mortgage loan in Portugal may include:

• adequate income - most Portuguese lenders are open to accepting almost all types of foreign income, except from countries facing international sanctions.
• good creditworthiness - having a good credit score can increase the chances of being approved for a mortgage loan.
• down payment towards the property purchase - 20%-50%
• a maximum debt-to-income level of 35%
• an LTV ratio of 75%-80%

Fixed or variable interest rate. What's the difference?

A fixed-rate mortgage means that the interest rate is locked in for the life of the loan and will not change, regardless of any changes in the market. This means that your monthly payment will remain the same throughout the loan term, providing a predictable and stable payment schedule.

On the other hand, a variable-rate mortgage means that the interest rate can change over time based on the current market conditions.

Can I obtain a 100% mortgage in Portugal?

Banks in Portugal are no longer allowed to offer 100% financing for properties through home loans, as per regulations set by the Bank of Portugal.

However, non-residents can still access 100% mortgage financing by opting to buy a property directly from a bank's portfolio.

Portugal has become a top destination for foreigners seeking to settle or invest in a holiday home. 

If you're considering doing the same, it's important to understand the process involved. 

For those looking for the best deals, a mortgage broker can connect you with various banks and financial institutions, simplifying the process. To see how a broker can support your journey, learn how a UK citizen used Homevest  to secure a mortgage and purchase a property in Portugal.

Sources used and checked on January 2025:

1. Millennium BCP Mortgages
2. Santander mortgages
3. Caixa Geral de Depósitos Mortgages
4. Novo Banco Mortgages
5. BPI Mortgages
6. Crédito Agrícola Mortgages
7. UCI Mortgage in Portugal for non-residents
8. Bankinter mortgages for non-residents
9. CGD mortgages for non-residents
10. ABANCA mortgages for non-residents in Portugal

We recommend obtaining professional or specialist advice before taking or refraining from any action based on the content in this article. The information in this article does not constitute legal, tax, or other professional advice from Homevest Limited. Prior results do not guarantee a similar outcome. We make no representations, warranties, or guarantees, whether express or implied, that the content in this article is accurate, complete, or up to date.